Supreme Court shoots down Tiffany appeal in eBay trademark case

SCOTUS has upheld earlier federal court decisions that eBay is not directly …

The US Supreme Court on Monday weighed in on another case watched by the tech industry, rejecting Tiffany & Co's appeal in its drawn-out trademark infringement suit against online auction site eBay. The company has long maintained that eBay was responsible for preventing auctions of counterfeit Tiffany jewelry and other items, but federal and appellate judges disagreed. The Supreme Court justices upheld those earlier decisions.

Tiffany originally sued eBay in 2004 when it discovered that most of the auctions for "Tiffany" items were counterfeit. It accused eBay of not being proactive enough about preventing auctions of counterfeit items, and that it was responsible for trademark infringement by allowing users to list items using the Tiffany name.

Judge Richard J. Sullivan disagreed, noting that eBay employs hundreds of people to identify and remove auctions for counterfeit items. eBay also reasonably responded to takedown requests from Tiffany. Judge Sullivan maintained that further policing of counterfeit auction items was the responsibility of Tiffany & Co itself.

The US Second Circuit Court of Appeals upheld the earlier decision in April of this year. "It is true that eBay did not itself sell counterfeit Tiffany goods; only the fraudulent vendors did, and that is in part why we conclude that eBay did not infringe Tiffany's mark," the court wrote in its opinion.

Tiffany took its complaint to the Supreme Court, suggesting that the case dealt with important questions about the burden of maintaining trademarks in Internet age. The company complained that eBay knew that the majority of auctions of Tiffany-marked goods were fakes and did little to stop it. eBay maintained that if trademark law needed to be changed specifically for Internet commerce, then that responsibility fell on Congress.

The Supreme Court rejected the appeal without offering a specific opinion.

While this case generally supports the legal principle that website operators are not directly responsible for users' actions on that site in the US, courts in the EU have been less consistent on the matter. A French court granted Louis Vuitton a large settlement against eBay for similar complaints in 2008, while a Belgian court sided with eBay in another similar complaint by L'Oréal later that year.

24 Reader Comments

How does a massive site like eBay expected to be able to police all their auctions for counterfeit goods? It's not a very realistic situation. When one uses a site like eBay, or even Amazon when the goods in question are not directly sold by Amazon themselves, one should keep in mind the common knowledge that if it looks too good to be true, it probably is. Caveat emptor.

Or perhaps we need to shut down eBay like the other sites for selling counterfeit goods...

what i don't understand is why corporations are having such a hard time getting the picture. service providers (like ebay) are not responsible for their content, the users (read sellers) of the service are.

companies like ebay would go bankrupt if they were held liable for every chanel knockoff that came though their system.

companies like ebay would go bankrupt if they were held liable for every chanel knockoff that came though their system.

which would probably make the corporations even happier, because the higher the barrier to entry to the used goods market is (from which the corporations make no additional sales revenue) then the stronger the market for new goods will be (from which the corporations make their profits).

There is a problem with people in general that, rather than accepting responsibility for themselves, they look for someone else to blame.

In this case, eBay employees hundreds of people to look for and remove auctions of fake goods but they can't catch them all, so they also respond to takedown requests (in this way Tiffany & Co could have assisted). Suppose eBay were shut down, would it solve the problem? No, for counterfeit goods are sold on the streets as well. Who could Tiffany & Co blame then?

Surely, one of the most atrocious of human inventions is the concept of "liability."

While this case generally supports the legal principle that website operators are not directly responsible for users' actions on that site in the US, courts in the EU have been less consistent on the matter.

Why should what the EU does or does not do in any way bind US courts and US law? The converse is true as well.

While this case generally supports the legal principle that website operators are not directly responsible for users' actions on that site in the US, courts in the EU have been less consistent on the matter.

Why should what the EU does or does not do in any way bind US courts and US law? The converse is true as well.

It's nice to compare. That french court gave right to Louis Vuitton against ebay is not very surprising when you look how industry there wields it's power. HADOPI crap was ordered by Vivendi (as well as similar copyright crap coming from EU) and it got through. So corruption is huge when it comes to certain industries that are just stupidly well connected (having a wife of Vivendi CEO do the proposal for changes to copyright laws in EU just reeks but is reality).

ok I have a question for everyone.My wife and I are "somewhere" and see a bag for sale that looks remarkably like a "Louis Vuitton". This particular one only costs a fraction of a real one. It looks like the real one and kinda feels like the real one, according to my wife. She dammed well knows that it is not a real one because they cost upwards of a thousand dollars or significantly more, and unless we win the lottery she's simply not going to be getting one.

So we purchase it.

Who did we harm by this purchase?

I do not include in this counterfeit drugs or other items that could harm people if they were used.

How is this different from sites that allow illegal music and movie downloads? Those get put out of business.

Primarily because those sites don't ALSO perform legal, legitimate functions, and as others said, don't respond to legitimate takedown notices. Ebay, YouTube, and Google respond to specific DMCA complaints, and also have, as a primary function, other uses.

I'm bothered by the phrasing of this article though - the Supreme Court rejected the appeal without comment, not "without a specific opinion", something they do with lots of cases. This wasn't weighing in, it was the opposite. The appellate decisions stands, but the Supreme Court doesn't hold a position.

ok I have a question for everyone.My wife and I are "somewhere" and see a bag for sale that looks remarkably like a "Louis Vuitton". This particular one only costs a fraction of a real one. It looks like the real one and kinda feels like the real one, according to my wife. She dammed well knows that it is not a real one because they cost upwards of a thousand dollars or significantly more, and unless we win the lottery she's simply not going to be getting one.

So we purchase it.

Who did we harm by this purchase?

I do not include in this counterfeit drugs or other items that could harm people if they were used.

This is the same principle as applies to the use of pirated media. What downloader is going to spend $100,000 buying his 100,000 songs? Many of them would simply not use the media. However, the content owner does not have to prove direct harm.

ok I have a question for everyone.My wife and I are "somewhere" and see a bag for sale that looks remarkably like a "Louis Vuitton". This particular one only costs a fraction of a real one. It looks like the real one and kinda feels like the real one, according to my wife. She dammed well knows that it is not a real one because they cost upwards of a thousand dollars or significantly more, and unless we win the lottery she's simply not going to be getting one.

So we purchase it.

Who did we harm by this purchase?

I do not include in this counterfeit drugs or other items that could harm people if they were used.

You harmed yourself by breaking the law. Then you get to explain to the kids why some laws are okay and others can be broken. :/

ok I have a question for everyone.My wife and I are "somewhere" and see a bag for sale that looks remarkably like a "Louis Vuitton". This particular one only costs a fraction of a real one. It looks like the real one and kinda feels like the real one, according to my wife. She dammed well knows that it is not a real one because they cost upwards of a thousand dollars or significantly more, and unless we win the lottery she's simply not going to be getting one.

So we purchase it.

Who did we harm by this purchase?

I do not include in this counterfeit drugs or other items that could harm people if they were used.

You harmed yourself by breaking the law. Then you get to explain to the kids why some laws are okay and others can be broken. :/

You should be explaining that to your kids anyway, somewhere in the discussion about how something being legal doesn't make it right, and conversely something being illegal doesn't make it wrong. The overwhelmingly vast majority of us break at least one law a day (especially automobile-related ones), and somehow society hasn't devolved into chaos. A lot of laws are obsolete, fail to provide a net benefit to society, or are outright pointless. Ignoring them doesn't harm anyone.

ok I have a question for everyone.My wife and I are "somewhere" and see a bag for sale that looks remarkably like a "Louis Vuitton". This particular one only costs a fraction of a real one. It looks like the real one and kinda feels like the real one, according to my wife. She dammed well knows that it is not a real one because they cost upwards of a thousand dollars or significantly more, and unless we win the lottery she's simply not going to be getting one.

So we purchase it.

Who did we harm by this purchase?

I do not include in this counterfeit drugs or other items that could harm people if they were used.

This is the same principle as applies to the use of pirated media. What downloader is going to spend $100,000 buying his 100,000 songs? Many of them would simply not use the media. However, the content owner does not have to prove direct harm.

Of course they don't have to prove direct harm; they wouldn't have a leg to stand on if they did. We'd live in a universe where the Jamie Thomases and Joel Tenenbaums would be faced with judgments of tens or hundreds of dollars, reflecting the actual harm they caused, and that would obviously be the end of the world as we know it. Besides, if you're going to go to the expense of buying laws (and lawmakers), you may as well buy the ones that benefit you the most, right?

Devingmerrick wrote:ok I have a question for everyone.My wife and I are "somewhere" and see a bag for sale that looks remarkably like a "Louis Vuitton". This particular one only costs a fraction of a real one. It looks like the real one and kinda feels like the real one, according to my wife. She dammed well knows that it is not a real one because they cost upwards of a thousand dollars or significantly more, and unless we win the lottery she's simply not going to be getting one.

So we purchase it.

Who did we harm by this purchase?

I do not include in this counterfeit drugs or other items that could harm people if they were used.

You harmed yourself by breaking the law. Then you get to explain to the kids why some laws are okay and others can be broken. :/

Read what he wrote again...."looks like the real one and kinda feels like the real one". Not that it's marked as one or sold as one. It's obviously a knock-off; and as much as Vuitton doesn't like that...tough shinola...that's business...somebody is ALWAYS going to make a knock-off of an expensive item and sell it for less. That's business in the big kids world. It's not illegal It's not immoral. It's just business.

The problem that eBay has it that they don't have the exact merchandise in hand to (if they even had experts to vet the item) verify whether ANY given item is exactly as it's being described and offered for sale (or for that matter is exactly represented by the picture). They can issue a sales take-down based on complaint, but that doesn't stop the seller from putting it right back up and claiming it's not fake. who is going to actually buy the item to exam it? As I have found out over the years; just because something is marked with a name doesn't make it so....there are a lot of fraud artists in the world who are willing to buy a stamp and mark an item to drive the price from $50 to $500. If you don't know what you are buying you're going to get burned...whether on eBay or the corner flea-market.

ok I have a question for everyone.My wife and I are "somewhere" and see a bag for sale that looks remarkably like a "Louis Vuitton". This particular one only costs a fraction of a real one. It looks like the real one and kinda feels like the real one, according to my wife. She dammed well knows that it is not a real one because they cost upwards of a thousand dollars or significantly more, and unless we win the lottery she's simply not going to be getting one.

So we purchase it.

Who did we harm by this purchase?

I do not include in this counterfeit drugs or other items that could harm people if they were used.

This is the same principle as applies to the use of pirated media. What downloader is going to spend $100,000 buying his 100,000 songs? Many of them would simply not use the media. However, the content owner does not have to prove direct harm.

It's not the same at all.

First, to answer the original question you are harming Louis Vitton, but not because of the lost sale (you weren't going to buy the real one anyway). Your wife walking around in her cheap mall clothes (let's assume for argument ) with a LV bag on her arm diminishes the brand because it's obviously fake (because she's dressed that way) and makes other people think real ones might also be fake. Similar thing happens even if your wife dresses nicely. The reduced scarcity of the bags in public means that real ones are less of a status symbol. Obviously the whole point of an LV bag is status, so diminishing that with knockoff goods does actual damage to the LV brand. (Non quantifiable damage, but still damage.)

The music piracy thing isn't the same. No one cares whether ugly/poor people have pirated access to music that pretty/rich people do, and there's no concern over scarcity. But that doesn't reduce the fact that it's just wrong to enjoy music that you didn't pay for. It's completely obvious to any rational person that if everyone did that, there would be no music/movie industry. Society depends on people playing by the rules (or laws in this case) to be sure things are fair. Criminal/civil penalties are there to ensure people stay in line. Rail all you want against those laws being enforced but the vast majority of society wants them to be enforced, so they will be.

Devingmerrick wrote:ok I have a question for everyone.My wife and I are "somewhere" and see a bag for sale that looks remarkably like a "Louis Vuitton". This particular one only costs a fraction of a real one. It looks like the real one and kinda feels like the real one, according to my wife. She dammed well knows that it is not a real one because they cost upwards of a thousand dollars or significantly more, and unless we win the lottery she's simply not going to be getting one.

So we purchase it.

Who did we harm by this purchase?

I do not include in this counterfeit drugs or other items that could harm people if they were used.

You harmed yourself by breaking the law. Then you get to explain to the kids why some laws are okay and others can be broken. :/

Read what he wrote again...."looks like the real one and kinda feels like the real one". Not that it's marked as one or sold as one. It's obviously a knock-off; and as much as Vuitton doesn't like that...tough shinola...that's business...somebody is ALWAYS going to make a knock-off of an expensive item and sell it for less. That's business in the big kids world. It's not illegal It's not immoral. It's just business.

Well it is actually illegal to a) use the trademark without permission and b) fraudulently claim it is the real thing. In this case (street vendor selling it for cheap) fraud isn't likely but if it has the LV labeling, it's certainly trademark infringement. Generally people don't buy knockoffs that have inaccurate labels since the point of buying it is to make yourself look like there's a chance someone loves you enough to buy the real thing. People don't want to look like they bought a $10 bag from a street vendor, so knockoffs are almost always as close to exact replicas as they can make them.

ok I have a question for everyone.My wife and I are "somewhere" and see a bag for sale that looks remarkably like a "Louis Vuitton". This particular one only costs a fraction of a real one. It looks like the real one and kinda feels like the real one, according to my wife. She dammed well knows that it is not a real one because they cost upwards of a thousand dollars or significantly more, and unless we win the lottery she's simply not going to be getting one.

So we purchase it.

Who did we harm by this purchase?

I do not include in this counterfeit drugs or other items that could harm people if they were used.

In my opinion, you did nothing wrong, as you were the purchaser, not the distributor. You didn't specify, but if there is no Louis Vuitton branding, then there is nothing wrong by any party, its just a cheap lookalike. If there is the brand name, then there has been counterfeiting/trademark infringement by the distributing party. IANAL, you may be liable for purchasing counterfeit goods.

As far as damages, luxury items depend on perceived value. If there are a ton of counterfeit bags out there, that perceived value goes down and they lose business.

ok I have a question for everyone.My wife and I are "somewhere" and see a bag for sale that looks remarkably like a "Louis Vuitton". This particular one only costs a fraction of a real one. It looks like the real one and kinda feels like the real one, according to my wife. She dammed well knows that it is not a real one because they cost upwards of a thousand dollars or significantly more, and unless we win the lottery she's simply not going to be getting one.

So we purchase it.

Who did we harm by this purchase?

I do not include in this counterfeit drugs or other items that could harm people if they were used.

Well, as mentioned you take a chance of being fined or otherwise punished depending on where the item was purchased.

The other explanation I saw prominently displayed in Venice was that by buying counterfeits, your money is going to criminals and you are supporting this and their other illicit enterprises.

(I don't care either way, it just was advertised everywhere when I was over there.)

No one is really harmed by counterfeiting (as long as the buyer knows it isn't real and the product is safe) and most of us could give a rat's ass is LV or some old Beverly Hills bitch with her poodle feels cheated for being dumb enough to pay $5000 for a hand bag that is made in China for $4.99 just like the knockoff.

They can't fine you or anything for buying a counterfeit hand bag for $25 as they can't prove that you knew it was fake or if the spelling is off thing it really isn't a counterfeit ; )